Bearing / Machine Components: Policy Bias Differentiation Under The Boom
Bearing Industry as capital goods production sector influenced by economic cycles, through the study of Japan and China Bearing Historical development of the industry, we believe that capital goods production sector, as its cyclical correlation with the macroeconomic cycle is very high, international expansion can resist their risk of a recession, but still difficult to avoid the global economic crisis. China’s bearing industry since 2006, entered a weaker external demand, a new era of stronger domestic demand, domestic factors dominated industry. Fixed asset investment and credit growth and bearing a positive correlation between industry growth rate, we generally judge in the current macro-control policy, the bearing industry in 2008 growth will be down. Cheng Daguo
China is not the bearing shaft power, China is the world’s fourth largest bearing producer behind the U.S., EU and Japan, accounting for 10% of the total global market; 2007, the total of China Bearing Industry Pin Sales revenue of approximately 80.5 billion, up 25.7%, a total of 11.022 billion units producing all kinds of rolling bearings, up 37.86 percent. The vast majority of our production is small and small bearings, bearing more than large-scale production in less than 3%, but the method of calculation of output accounted for 35% of large bearings.
Division of the product structure, ball bearings largest, accounting for 79.8% of total production.
Industry brought over scattered low competition, low profit margins due to backward technology; scale bearing enterprises in China 1205, the top 30 only 32.97 percent of market concentration, the average per 1.099% market share, industry concentration is considerably low. Concentration makes the industry gross profit and ROE is lower than international competitors, in 2007 China’s bearing industry average gross margin of about 14.3%, the average ROE of 2.38%, also led to the raw materials in China bearing the loss of voice, enterprise can not effectively pass the cost of raw materials increased.
Policy guidance highlights the industry consolidation and upgrade; although the angle from the output value of China in 2008 will be 11 five goals ahead of schedule, but the technology and power consumption indicator is still to be improved. Overall, although the bearing industry, the next few years will be subject to credit policy and economic cycles fluctuate, but the bearing industry, industry consolidation policy highlights the tendency to upgrade and trade protection, policy-oriented role will lead the capital to invest in the bearing industry focus areas, to high-precision, high-tech and high value-added integrated upgrade of the road segments will have more surprises.
Credit and investment cycles and policies tend to make sub-industry boom of differentiation, bearing our most promising sub-sectors are bearings of construction machinery, wind power bearings, railway bearings, agricultural bearings, bearing metallurgical industry, which some degree of sub-sectors in the economy up period.
Motorcycle bearing, home appliances bearings, machine tool bearings these sub-sectors in the adjustment, driver is the downstream industry, the rising demand for technology upgrades to enhance the industry demand for products bearing mainly high value-added products, primarily from demand import substitution. Automobile bearings, mechanical bearings by the China Petroleum and Chemical macro-control of the economy dropped the next two years.
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